Investment approach
Arras contract in Barcelona: what to review with a lawyer
What an arras contract leaves to the text, not the law: type of deposit, mortgage condition, floor area, costs, deadlines. A clause table for the lawyer and the cost of exit worked out.
An arras contract (a preliminary sale contract with a deposit) fixes the price, the time until the notary and the price of walking away from the deal. In Catalonia, money handed to the seller is by default treated as part of the price, and the right to withdraw by losing the deposit (for the seller, by returning it doubled) exists only if it was expressly written in (art. 621-8 CCCat, the Civil Code of Catalonia). That is why questions for the lawyer are asked against the text, before signing.
What in an arras contract is decided by the text and not by the law
The law leaves almost everything important to the parties. Book Six of the Civil Code of Catalonia (CCCat) sets default rules, and they apply only when the contract is silent. For a property in Barcelona that means three things. If the type of deposit is not named, the sum is treated as arras confirmatorias, that is an advance on a deal already concluded, and there is no free exit at the price of the deposit. If the mortgage condition is not excluded, the buyer may withdraw when the bank refuses the loan and the refusal is documented (art. 621-49 CCCat). If nothing is said about costs, the buyer pays for the notarial escritura (the deed of sale) and the first copy (art. 531-6 CCCat).
How the types of deposit differ is covered in the article on the three types of arras. Here the subject is the clauses that need to be agreed before signing.
Which contract clauses to go through with the lawyer
The short answer: the ones where the default rule can work against the buyer. The table below serves as an agenda for the meeting with the abogado (lawyer).
| Contract clause | Question for the abogado | What is at stake | Default rule |
|---|---|---|---|
| Type of deposit | Are arras penitenciales (withdrawable deposit) expressly written in? | Whether one can leave by losing only the deposit | art. 621-8.1 and 621-8.2 CCCat |
| Mortgage condition | Is the right to withdraw on a bank refusal excluded? What is the deadline to document it? | Return of the deposit if the mortgage is refused | art. 621-49 CCCat |
| Floor area | Is the price total or per square metre? Is there a floor-area clause? | Recalculation of the price on a discrepancy | art. 621-50 CCCat |
| Costs | Who pays the notary, registration, plusvalía (municipal tax on the rise in land value)? How is the IBI (annual property tax) split? | Costs on top of the price | art. 531-6 CCCat |
| Where the money sits | With the seller, with the agency or in a notary deposit? | How to get the deposit back in a dispute | art. 621-8.3 CCCat |
| Condition on the completion date | Is the flat vacant? What about the seller's mortgage and the derramas (special assessments)? | What to do if the seller is not ready | contract |
The clause on derramas and debts to the comunidad de propietarios (owners' association) is worded explicitly. The documents the lawyer needs for this conversation are collected in the checklist before signing the arras.
What it costs to walk away: a worked example
The price of exit depends on the type of deposit and on whether the mortgage condition has operated. Worked example, not a forecast: a flat for 600,000 €, a deposit in the contract of 60,000 € (10% is taken for a round count; the law sets no size for the deposit).
| Scenario | What happens to the deposit | Result for the buyer |
|---|---|---|
| Arras penitenciales, the buyer changes their mind | Stays with the seller | minus 60,000 € |
| Arras penitenciales, the seller changes their mind | Returned doubled | plus 60,000 € on top of their own money |
| The bank refuses, the mortgage condition is not excluded, the refusal is documented in time | Returned | 0 € |
| Arras confirmatorias, the buyer cannot complete | No free exit, a dispute over performance or damages | decided by a court, the sum is not known in advance |
Floor area follows a separate arithmetic. If the price was calculated per metre, a discrepancy of up to 10% changes the price proportionally: at an 8% difference that is 48,000 € in the worked example (art. 621-50.2 CCCat). If the price is a lump sum and the parties clearly wanted the deal in any case, the discrepancy does not change the price (art. 621-50.3). So the question "how is the price written in the contract" costs money.
How to word the mortgage condition so that it can be used
The condition works only if the contract names bank financing and the deadline by which the buyer brings the refusal document. Art. 621-49 CCCat gives the right to withdraw if the bank's refusal is documented within the agreed time and is not caused by the buyer's negligence. The seller then returns the price received and the penitential deposit.
The practical questions for the lawyer here:
- Is a particular bank named, or does any refusal do?
- What is the deadline to document it, and does the bank have time within it to carry out the tasación (bank valuation)?
- What counts as the buyer's negligence: an incomplete set of documents, a change of job, an application to a single bank?
- Is this right excluded by a general phrase at the end of the contract?
How rates and the bank valuation affect the size of the loan is covered in the article on Euribor and the mortgage.
Can the deposit be protected through a notary and the registry
It can, if the deposit is penitential. Under art. 621-8.3 CCCat, arras penitenciales for a term of no more than six months, deposited with a notary, can be noted in the Registro de la Propiedad (Land Registry), and the property itself then answers for their return. If a party withdraws, the notary hands the deposit to whoever is entitled to it.
The charge is cancelled 60 days after the agreed term, if the buyer has not registered a claim earlier, when the buyer's withdrawal is reliably established, or after the sale is registered. For a buyer from abroad who barely knows the seller, this is safer than a transfer to a personal account.
When the standard arras text does not fit
The agency's template does not fit if the deal goes beyond the simple purchase of a flat from a private individual:
- a long check of the plot or the licence is needed, in which case it is worth comparing the arras with an option to buy;
- the seller repays their own mortgage or lifts an attachment only on the day of completion;
- a tenant lives in the flat, or the seller stays on after the escritura;
- the buyer takes a mortgage with a short time until the notary;
- the seller is a company or a non-resident, and tax withholdings change.
In these cases the text is written for the deal, rather than a template being amended on the day of signing.
Questions and answers
What happens if the contract does not state the type of arras?
In Catalonia the deposit is then treated as confirmatory: part of the price and a sign that the deal is concluded. One cannot simply leave by losing the deposit, and the dispute will be about performance of the contract. That is why a penitential deposit is written in expressly.
How much is the deposit usually when buying a flat in Barcelona?
The law sets no size; the parties agree the sum. The larger the deposit, the more it matters that the mortgage condition, the deadlines and the seller's documents are written precisely.
Can the deposit be recovered if the bank does not grant the mortgage?
Yes, if the contract provides for bank financing, the right is not excluded, and the bank's refusal is documented within the agreed time and is not caused by the buyer's negligence. The wording is checked by the abogado before signing.
Who pays the notary when buying a flat in Catalonia?
Unless the parties agree otherwise, the buyer pays for the escritura and the first copy, and the seller bears the costs of handing over the property. It is better to write the split of costs into the arras, so as not to argue about it at the notary's.
Why place the deposit with a notary?
A penitential deposit for a term of up to six months paid to a notary can be noted in the registry, and the property answers for its return. This lowers the risk when the buyer barely knows the seller. If the contract is already in your hands and the price still raises questions, start with an independent valuation of the property before signing.
